Apple's demands for a custom duty rebate on imported equipment for making iPhones in India has been rejected by the government. According to written reply to the Lok Sabha, commerce and industry minister Nirmala Sitharaman has said that "requests regarding rebates were examined and not accepted."
Apple India had sought concessions, including duty exemptions on manufacturing and repair units, components and capital equipment for smartphones for 15 years. Apple has also been asking for a concession on the 30 per cent compulsory local sourcing of components.
Sitharaman said that the government had received representations seeking the above mentioned concessions. But in order to promote domestic manufacturing capacities, the relaxations will only be valid for a period of three years from the opening of the first store, said Sitharaman in the Parliament. After three years, every smartphone maker is expected to meet the 30 percent local sourcing norms.
According to the commerce minister, the requests for rebate in customs duty on importing equipment were rejected on the grounds that there is already zero basic customs duty (BCD), zero excise duty / countervailing duties (CVD) (except for chargers, batteries and speakers) and zero special additional duty prescribed for components, accessories and sub-parts for the final manufacture of mobile phones / tablets.
Sitharaman also said that there would be no exemption from basic custom duty, countervailing duty (CVD) and special additional duty (SAD) on imports of articles needed for the repair of the mobile phones.
Also, keeping in mind the recent inclusion of the Goods and Services Tax (GST), all imports will be liable to integrated GST. Exemptions on central GST (CGST), state GST (SGST) and integrated GST (IGST) can only be granted per basis recommendations from the GST Council. From July onwards, both domestically and internationally manufactured mobile phones are subject to a 12 percent additional GST.